Echostar makes £22bn bid for DirecTV

The US satellite broadcaster, Echostar, has made a last-ditch bid to shatter Rupert Murdoch's dream of buying DirecTV by launching a £22bn counter bid.

Charlie Ergen, chairman of Echostar, made the all-share merger offer just as Mr Murdoch's News Corporation is putting the final touches to a DirecTV deal.

But Mr Ergen said a link-up between Echostar and DirecTV would yield greater cost savings than the proposed News Corp link-up.

General Motors, the owner of DirecTV and its parent company Hughes Electronics, said it had not looked at the new offer but would give serious consideration to legitimate bids.

The GM board will now discuss whether the Echostar bid is worth accepting, given that it is sure to attract the attention of US competition regulators.

If Echostar and DirecTV merged, the combined entity would have 16m subscribers and complete dominance of the satellite broadcasting market.

Mr Ergen is consulting anti-trust experts, including the government's prosecuting lawyer in the Microsoft trial, in a bid to convince the GM board the merger could get clearance in a "reasonable" timeframe.

Although it is widely acknowledged that Mr Murdoch still has the upper hand, the Echostar offer could still upset his plans.

The GM board may use it as a catalyst for demanding more cash from Mr Murdoch or may force him to place a higher value on DirecTV and Hughes Electronics.

If Mr Murdoch clinches the deal, he plans to merge his Sky Global Networks satellite companies with DirecTV and create a global TV broadcaster.

The tycoon's satellite TV interests include StarTV in Asia and BSkyB in the UK.